Denver Post: State's 'Amazon tax' was right idea in wrong place

When a federal judge last week shot down Colorado's so-called Amazon tax, state Republicans saw it as a win.

Colorado House Majority Leader Amy Stephens called the judge's decision a vindication for Republicans who had opposed the effort to push online retailers to collect sales taxes.

Once the partisan celebrations simmer down, we hope Republicans will think hard about another principle the GOP holds dear -- a level playing field for all businesses.

However poorly handled and unconstitutional the Colorado Amazon tax was, the idea behind it should be one the GOP can get behind.

That is the notion that all businesses, whether they operate out of a store down the road or from a website based who knows where, ought to have a level playing field where taxes are concerned.

Government should not be in the business of picking winners and losers by forcing one to collect sales taxes and not the other.

As it turns out, federal legislation that would inject some parity into the equation has been introduced in Congress and has garnered bipartisan support. Recently, even Maine's governor, elected with strong Tea Party support, called for its passage.

The Marketplace Fairness Act, which we favor, would allow states to tax online purchases.

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What's the difference between the Colorado law and the proposed federal legislation? The major difference, the one that enables us to support it, is that it's the right venue for the law. Though we opposed Colorado's Amazon tax measure, we don't disagree with the idea behind it. State legislation was simply the wrong way to go about it. The legislation violated the interstate commerce clause of the U.S. Constitution and we were confident the courts would nullify it, as had been the case in other states. We took no joy in the decision, but it was the correct call.

So where does Colorado go from here?

We think state legislators from both parties, mayors, county commissioners, the governor and policymakers ought to make a concerted effort to push federal lawmakers to pass the Marketplace Fairness Act.

Estimates by the University of Tennessee's business school show that if Colorado had taxed e-commerce in 2008, the state would have collected between $176 million and $275 million in revenue. Local taxing authorities would have realized between $171 million and $267 million.

Though it might have been at one time, e-commerce is no longer a nascent activity that needs protection. To the contrary, online retailers are an increasingly vital piece of the economy, and they ought to have the same tax-collection obligations as traditional business owners.

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